Congress Looking At Balancing The Online Scales With Main Street Fairness

It may pale in comparison to the titanic Congressional struggle over the debt ceiling, but the ongoing nexus tax battle between states and Internet retailers like Amazon is receiving national attention. With separate federal tax bills slated for introduction in both the House and the Senate, the tit-for-tat war between online retailers and state tax collectors over the so-called Amazon tax may soon come to an end.

Sen. Dick Durbin (D-IL) introduced the Main Street Fairness Act in the Senate on July 29. Co-sponsored by Sen. Tim Johnson (D-SD), the bill has been considered by Congress on previous occasions, but the recent slew of state-passed sales tax laws caught the attention of some leaders at the federal level. Rep. John Conyers (D-MI) and  Rep. Peter Welch (D-VT) are expected to introduce a similar bill in the House.

Even as Amazon backs a referendum on California’s version of the tax, it’s voiced support for national legislation.

In a letter to Durbin, Paul Misener, Vice President for Global Public Policy at Amazon, said that the “bill returns the discussion of interstate collection of sales tax to Congress, which the Supreme Court says is the appropriate forum to resolve the issue. Amazon looks forward to working with you and your colleagues in Congress to help enact sales tax collection legislation.”

One of the most populate arguments of online sales tax proponents comes from what I’ve come to think of as the Loophole Platform. Durbin’s office offered the following:

“Without this legislation, local retailers in our communities face a competitive disadvantage because they must collect sales taxes while a growing number of online and catalog retailers do not.”

Standing opposite Amazon, eBay expressed its continued dissent to the Act in a company statement because of the “new taxes and regulatory burden” placed on small businesses. While Durbin’s bill does include a “small seller exception,” what exactly that means will be left up to the Governing Board of the Streamline Sales and Use Tax Agreement.

The legislation also has the support of the “National Governors Association, the National Conference on State Legislatures, the National Retail Federation, the International Council of Shopping Centers, the Retail Industry Leaders Association, the National Association of Real Estate Investment Trusts and the National Association of College Stores.”

At this point, the legislation still lacks a Republican sponsor and past co-sponsor, Sen. Mike Enzi  (R-WY) has yet to signal his support. Republican support in general may not be an option. Brian Bieron, a Senior Director at eBay, noted that two Republican representatives in the House introduced a House resolution that said Congress would not give states “the authority to impose unfair tax collecting requirements on small online businesses.” Given this sentiment and  based on Congress’ recent behavior, any movement on this legislation will be small without bi-partisan support, particularly before the 2012 election.

With that in mind, now is the time to contact your senators and representatives. State budgets are under stress and the pressure to pursue online sales tax isn’t going away. We need to add our voices to the discussion and ensure that our experience and perspective doesn’t get lost in the pursuit of “fairness.”

About Britt Raybould

Britt Raybould has a passion for telling stories and she specializes in helping companies figure out how to tell their own stories. Through her firm, Write Bold, she shows companies how storytelling can define them, both to their customers and within their industry. When she remembers to, Britt blogs on her personal sites at bold-words.com and brittraybould.com. You can find Britt on Twitter @britter.

Twitter: britter

3 Responses to Congress Looking At Balancing The Online Scales With Main Street Fairness

  1. […] Article in Rave News: Congress Looking At Balancing The Online Scales With Main Street Fairness […]

  2. Nick J. West says:

    The impact for both Main Street merchants and small businesses is not something to take lightly. Additional regulation, or burden placed on a small struggling business to become a tax collector is not just another hurdle, it may be the last nail in the coffin for many small businesses looking to grow beyond ‘small’.

  3. Carl Weber says:

    I don’t understand how taxing internet retailers is now considered “fair”. States collect sales taxes, not the feds. States cannot tax out of state companies. End of story.